HNWIs in IPOs can turn from cornerstone to Tower of Babel

REAL estate investment trusts (Reits) used to boast of cornerstone investments from the likes of sovereign wealth funds and major institutional investors in their initial public offerings (IPOs).

This is less so today.

Instead, a sizeable chunk of the cornerstone tranche in recent Reit IPOs - including the latest listing aspirant Elite Commercial Reit - is being taken up by high net worth individuals (HNWIs) such as private banking and wealth management clients.

According to a 2013 paper by Allen & Gledhill lawyers Tan Tze-Gay and Jeanne Ong, it was common in the past for cornerstone investo…